General investigated for emails to Petraeus friend

PERTH, Australia (AP) — In a new twist to the Gen. David Petraeus sex scandal, the Pentagon said Tuesday that the top American commander in Afghanistan, Gen. John Allen, is under investigation for alleged “inappropriate communications” with a woman who is said to have received threatening emails from Paula Broadwell, the woman with whom Petraeus had an extramarital affair.

Defense Secretary Leon Panetta said in a written statement issued to reporters aboard his aircraft, en route from Honolulu to Perth, Australia, that the FBI referred the matter to the Pentagon on Sunday.

Panetta said that he ordered a Pentagon investigation of Allen on Monday.

A senior defense official traveling with Panetta said Allen’s communications were with Jill Kelley, who has been described as an unpaid social liaison at MacDill Air Force Base, Fla., which is headquarters to the U.S. Central Command. She is not a U.S. government employee.

Kelley is said to have received threatening emails from Broadwell, who is Petraeus’ biographer and who had an extramarital affair with Petraeus that reportedly began after he became CIA director in September 2011.

Petraeus resigned as CIA director on Friday.

Allen, a four-star Marine general, succeeded Petraeus as the top American commander in Afghanistan in July 2011.

The senior official, who discussed the matter only on condition of anonymity because it is under investigation, said Panetta believed it was prudent to launch a Pentagon investigation, although the official would not explain the nature of Allen’s problematic communications.

The official said 20,000 to 30,000 pages of emails and other documents from Allen’s communications with Kelley between 2010 and 2012 are under review. He would not say whether they involved sexual matters or whether they are thought to include unauthorized disclosures of classified information. He said he did not know whether Petraeus is mentioned in the emails.

“Gen. Allen disputes that he has engaged in any wrongdoing in this matter,” the official said. He said Allen currently is in Washington.

Panetta said that while the matter is being investigated by the Defense Department Inspector General, Allen will remain in his post as commander of the International Security Assistance Force, based in Kabul. He praised Allen as having been instrumental in making progress in the war.

The FBI’s decision to refer the Allen matter to the Pentagon rather than keep it itself, combined with Panetta’s decision to allow Allen to continue as Afghanistan commander without a suspension, suggested strongly that officials viewed whatever happened as a possible infraction of military rules rather than a violation of federal criminal law.

Allen was Deputy Commander of Central Command, based in Tampa, prior to taking over in Afghanistan. He also is a veteran of the Iraq war.

In the meantime, Panetta said, Allen’s nomination to be the next commander of U.S. European Command and the commander of NATO forces in Europe has been put on hold “until the relevant facts are determined.” He had been expected to take that new post in early 2013, if confirmed by the Senate, as had been widely expected.

Panetta said President Barack Obama was consulted and agreed that Allen’s nomination should be put on hold. Allen was to testify at his confirmation hearing before the Senate Armed Services Committee on Thursday. Panetta said he asked committee leaders to delay that hearing.

NATO officials had no comment about the delay in Allen’s appointment.

“We have seen Secretary Panetta‘s statement,” NATO spokeswoman Carmen Romero said in Brussels. “It is a U.S. investigation.”

Panetta also said he wants the Senate Armed Services Committee to act promptly on Obama’s nomination of Gen. Joseph Dunford to succeed Allen as commander in Afghanistan. That nomination was made several weeks ago. Dunford’s hearing is also scheduled for Thursday.

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Associated Press writer Slobodan Lekic in Kabul, Afghanistan, contributed to this report.

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Clarke’s 218 puts Australia on front foot

BRISBANE (Reuters) – Australia captain Michael Clarke scored a brilliant unbeaten double century to give the hosts a remarkable 37-run first innings lead on the fourth day of the first test against South Africa on Monday.

Supported first by a maiden century from opener Ed Cowan in a record stand of 259, and then by Mike Hussey‘s 86 not out, Clarke’s 218 helped lift Australia from 40 for three when he took to the crease on Sunday to 487 for four when stumps were drawn.

It was Clarke’s sixth test century, and his third double hundred, in the 15 tests since he was named captain last year in the wake of the Ashes humiliation and Australia’s quarter-final exit at the World Cup.

Although by no means a chanceless knock, the 31-year-old played with patience when South Africa’s vaunted pacemen got anything out of the Gabba track before punishing anything loose with some fine shot-making.

When he carried his bat back to the pavilion at the end of the day to the raucous cheers of a sparse crowd at the famous Brisbane ground, Clarke had faced 350 balls over 504 minutes and scored 21 fours.

“I’m very happy with that,” Clarke, who accumulated his 1,000 test run of the year during the innings, said in an interview on the boundary.

“I didn’t feel great at the start and I think Ed Cowan batted beautifully.

“We’re in a great position with a 30-odd lead. I’d like another 70 odd runs in the morning and then I want to have a crack with the ball. We’ll see what happens.”

Cowan departed for 136 in heartbreaking fashion just before tea, run out at the non-striker’s end when Dale Steyn got a finger to a Clarke drive that hit the stumps and the opener was caught out of his crease backing up.

RECORD PARTNERSHIP

His partnership with Clarke was an Australian record for the fourth wicket at the Gabba, beating the 245 Clarke and Mike Hussey made against Sri Lanka in 2007.

Cowan’s wicket was the only wicket to fall on the day and Hussey started pouring on the runs as if determined to get the record back for his own partnership with his captain.

The 37-year-old bucked his poor recent form against South Africa by reaching his half century off just 68 balls with a drive through long-off and was closing on a century of his own when play ended.

It was Hussey’s cut four off Morne Morkel with which Australia overhauled South Africa’s first innings tally of 450 and put themselves in with an unlikely chance of even winning a test which lost an entire day to rain on Saturday.

Clarke’s negotiation of the “nervous nineties” for his century had been fraught and he was nearly run out going for a second run that would have brought him to the hundred mark.

There were no such jitters on his approach to the two hundred mark, which he passed by slapping the ball through mid-on for two runs before giving the badge on his helmet another kiss.

Cowan’s century was a retort to those critics who have consistently questioned his place in the team since he made his debut in last year’s Melbourne test against India.

The 30-year-old lefthander reached the mark two overs after lunch by pulling a short Vernon Philander delivery for four to the square leg boundary, beginning his joyous celebrations before the ball hit the rope.

South Africa’s number one test ranking is on the line in the series, which continues with matches in Adelaide and Perth after Brisbane.

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Microsoft’s Surface tablet has “modest” start: Ballmer

PARIS (Reuters) – Microsoft Corp‘s new Surface tablet – its challenger to Apple‘s iPad – had a “modest” start to sales because of limited availability, Microsoft Chief Executive Steve Ballmer told French daily Le Parisien.

The world’s largest software company put the Surface tablet center stage at its Windows 8 launch event last month in its fightback against Apple and Google in the exploding mobile computing market.

“We’ve had a modest start because Surface is only available on our online retail sites and a few Microsoft stores in the United States,” Ballmer was quoted as saying.

Meanwhile, 4 million upgrades to Windows 8 were sold in the three days following the system’s launch, Ballmer added. (Reporting by Lionel Laurent; Editing by David Cowell)

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Hathaway says ‘Les Mis’ made her feel deprived

NEW YORK (AP) — Anne Hathaway credits her new husband Adam Schulman for helping her get through the grueling filming of the screen adaptation of “Les Miserables.”

In “Les Mis,” the 30-year-old actress plays Fantine, a struggling, sickly mother forced into prostitution in 1800s Paris.

Hathaway lost 25 pounds and cut her hair for the role. She tells the December issue of Vogue, the part left her in a “state of deprivation, physical and emotional.” She felt easily overwhelmed and says Shulman was understanding and supportive.

The couple wed in September in Big Sur, Calif. Hathaway wore a custom gown by Valentino whom she collaborated with on the design. Working with the designer is a memory she says she will “treasure forever.”

The December issue of Vogue hits stores Nov. 20.

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British medical journal slams Roche on Tamiflu

LONDON (AP) — A leading British medical journal is asking the drug maker Roche to release all its data on Tamiflu, claiming there is no evidence the drug can actually stop the flu.

The drug has been stockpiled by dozens of governments worldwide in case of a global flu outbreak and was widely used during the 2009 swine flu pandemic.

On Monday, one of the researchers linked to the BMJ called for European governments to sue Roche.

“I suggest we boycott Roche’s products until they publish missing Tamiflu data,” wrote Peter Gotzsche, leader of the Nordic Cochrane Centre in Copenhagen. He said governments should take legal action against Roche to get the money back that was “needlessly” spent on stockpiling Tamiflu.

Last year, Tamiflu was included in a list of “essential medicines” by the World Health Organization, which often prompts governments or donor agencies to buy the drug.

WHO spokesman Gregory Hartl said the agency recommended the drug be used to treat unusual influenza viruses like bird flu. “We do have substantive evidence it can stop or hinder progression to severe disease like pneumonia,” he said.

In 2009, the BMJ and researchers at the Nordic Cochrane Centre asked Roche to make all its Tamiflu data available. At the time, Cochrane Centre scientists were commissioned by Britain to evaluate flu drugs. They found no proof that Tamiflu reduced the number of complications in people with influenza.

“Despite a public promise to release (internal company reports) for each (Tamiflu) trial…Roche has stonewalled,” BMJ editor Fiona Godlee wrote in an editorial last month.

In a statement, Roche said it had complied with all legal requirements on publishing data and provided Gotzsche and his colleagues with 3,200 pages of information to answer their questions.

“Roche has made full clinical study data…available to national health authorities according to their various requirements, so they can conduct their own analyses,” the company said.

Roche says it doesn’t usually release patient-level data available due to legal or confidentiality constraints. It said it did not provide the requested data to the scientists because they refused to sign a confidentiality agreement.

Roche is also being investigated by the European Medicines Agency for not properly reporting side effects, including possible deaths, for 19 drugs including Tamiflu that were used in about 80,000 patients in the U.S.

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Petraeus' aide wondered about Broadwell's behavior, qualifications

Retired Gen. David Petraeus, who resigned as CIA director last week after admitting an extramarital relationship, could possibly face military prosecution for adultery if officials turn up any evidence to counter his apparent claims that the affair began after he left the military.

The affair between Petraeus and his biographer, Paula Broadwell, both of whom are married, began several months after his retirement from the Army in August 2011 and ended four months ago, retired U.S. Army Col. Steve Boylan, a former Petraeus spokesman, told ABC News.

Broadwell, 40, had extraordinary access to the 60-year-old general during six trips she took to Afghanistan as his official biographer, a plum assignment for a novice writer.

"For him to allow the very first biography to be written about him, to be written by someone who had never written a book before, seemed very odd to me," former Petraeus aide Peter Mansoor told ABC News.

The timeline of the relationship, according to Patraeus, would mean that he was carrying on the affair for the majority of his tenure at the CIA, where he began as director Sept. 6, 2011. If he carried on the affair while serving in the Army, however, Patraeus could face charges, according to Article 134 of the Uniform Code of Military Justice, which reprimands conduct "of a nature to bring discredit upon the armed forces."

Whether the military would pursue such action, whatever evidence it accumulates, is unclear.

As the details of the investigation launched by the FBI unraveled this weekend, it became clear that the woman at the heart of the inquiry that led to Petraeus' downfall had been identified as Jill Kelley, a Florida woman who volunteers to help the military. She is a family friend of Petraeus, who Broadwell apparently felt threatened by.

Kelley and her husband are longtime supporters of the military, and six months ago she was named "Honorary Ambassador to Central Command" for her volunteer work with the military. Officials say Kelley is not romantically linked to Petraeus, but befriended the general and his wife when he was stationed in Florida. The Kelleys spent Christmases in group settings with the Petraeuses and visited them in Washington D.C., where Kelley's sister and her son live.

"We and our family have been friends with Gen. Petraeus and his family for over five years." Kelley said in a statement Sunday. "We respect his and his family's privacy and want the same for us and our three children."

Earlier this year, around the time that Petraeus and Broadwell were breaking off their affair, Kelly began receiving anonymous emails, which she found so threatening she went to authorities. The FBI traced the messages to Broadwell's computer, where they found other salacious and explicit emails between Broadwell and Petraeus that made it clear to officials that the two were carrying on an affair.

Investigators uncovered no compromising of classified information or criminal activity, sources familiar with the probe said, adding that all that was found was a lot of "human drama."

Broadwell, a married mother of two, had access to Petraeus while she was with him in Afghanistan as his official biographer. People close to the general had previously suspected Broadwell's feelings for him had crossed a professional line.

They found Broadwell, who spent a year embedded with Petraeus in Afghanistan, to be embarrassing and far too "gushy" about him. They said to one another they thought Broadwell "was in love with him," sources told ABC News.

Petraeus is said to have been the one to have broken off the extramarital affair.

His storied career, first as the public face of two wars in Iraq and Afghanistan, and later as director of the CIA, came crashing down Friday when he announced his resignation from the intelligence agency, citing the indiscretion.

"After being married for over 37 years, I showed extremely poor judgment by engaging in an extramarital affair. Such behavior is unacceptable, both as a husband and as the leader of an organization such as ours," Petraeus said in a statement Friday.

Director of National Intelligence James Clapper was made aware of the Petraeus situation Tuesday evening around 5 p.m. by the FBI, according to a senior intelligence source.

After having several conversations with Petraeus that evening and the next day, Clapper advised Petraeus that the best thing to do would be for him to resign, the source said.

Clapper notified the White House the next afternoon that Petraeus was considering resigning, according to the source. Petraeus then went to the White House Thursday and told the president he thought he should resign, and Obama accepted his resignation the next day, the source said.

Despite the lengthy investigation into Broadwell by the FBI, the White House says it was not made aware of it until Wednesday, the day after the election, a revelation that surprised many.

"It just doesn't add up. That the FBI would be carrying on this type of investigation without, again, bringing it to the president or the highest levels of the White House," Rep. Peter King, R-N.Y., said.

Petraeus and his wife, Holly, who have been married for 38 years, are said to be staying in their Arlington Home and are doing "OK."

"Knowing the family, I suspect it will be hard work, but given the effort, they will get through it," Boylan, the former Petraeus spokesman, said.

Numerous questions still remain about the investigation, and some on Capitol Hill are also frustrated because Petraeus was schedule to testify to the House and Senate intelligence committees about the attack on the U.S. consulate in Benghazi, Libya, in September.

The timing of Petraeus' resignation "was what it was," an official told ABC News, adding that the time had come to tie up any loose ends in the investigation and confront the general.

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Hathaway says ‘Les Mis’ made her feel deprived

NEW YORK (AP) — Anne Hathaway credits her new husband Adam Schulman for helping her get through the grueling filming of the screen adaptation of “Les Miserables.”

In “Les Mis,” the 30-year-old actress plays Fantine, a struggling, sickly mother forced into prostitution in 1800s Paris.

Hathaway lost 25 pounds and cut her hair for the role. She tells the December issue of Vogue, the part left her in a “state of deprivation, physical and emotional.” She felt easily overwhelmed and says Shulman was understanding and supportive.

The couple wed in September in Big Sur, Calif. Hathaway wore a custom gown by Valentino whom she collaborated with on the design. Working with the designer is a memory she says she will “treasure forever.”

The December issue of Vogue hits stores Nov. 20.

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http://www.vogue.com/

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Congress wants answers on F.B.I. investigation into Petraeus affair

WASHINGTON (AP) — Members of Congress said Sunday they want to know more details about the FBI investigation that revealed an extramarital affair between ex-CIA Director David Petraeus and his biographer, questioning when the retired general popped up in the FBI inquiry, whether national security was compromised and why they weren't told sooner.

"We received no advanced notice. It was like a lightning bolt," said Democratic Sen. Dianne Feinstein of California, who heads the Senate Intelligence Committee.

The FBI was investigating harassing emails sent by Petraeus biographer and girlfriend Paula Broadwell to a second woman. That probe of Broadwell's emails revealed the affair between Broadwell and Petraeus. The FBI contacted Petraeus and other intelligence officials, and Director of National Intelligence James Clapper asked Petraeus to resign.

A senior U.S. military official identified the second woman as Jill Kelley, 37, who lives in Tampa, Fla., and serves as an unpaid social liaison to MacDill Air Force Base in Tampa, where the military's Central Command and Special Operations Command are located.

Staffers for Petraeus said Kelley and her husband were regular guests at events he held at Central Command headquarters.

In a statement Sunday evening, Kelley and her husband, Scott, said: "We and our family have been friends with Gen. Petraeus and his family for over five years. We respect his and his family's privacy and want the same for us and our three children."

A U.S. official said the coalition countries represented at Central Command gave Kelley an appreciation certificate on which she was referred to as an "honorary ambassador" to the coalition, but she has no official status and is not employed by the U.S. government.

The official, speaking on condition of anonymity because he wasn't authorized to discuss the case publicly, said Kelley is known to drop the "honorary" part and refer to herself as an ambassador.

The military official, who spoke on condition of anonymity because he was not authorized to publicly discuss the investigation, said Kelley had received harassing emails from Broadwell, which led the FBI to examine her email account and eventually discover her relationship with Petraeus.

A former associate of Petraeus confirmed the target of the emails was Kelley, but said there was no affair between the two, speaking on condition of anonymity to discuss the retired general's private life. The associate, who has been in touch with Petraeus since his resignation, says Kelley and her husband were longtime friends of Petraeus and wife, Holly.

Attempts to reach Kelley were not immediately successful. Broadwell did not return phone calls or emails.

Petraeus resigned while lawmakers still had questions about the Sept. 11 attack on the U.S. Consulate and CIA base in Benghazi, Libya, that killed four Americans, including U.S. Ambassador Chris Stevens. Lawmakers said it's possible that Petraeus will still be asked to appear on Capitol Hill to testify about what he knew about the U.S. response to that incident.

Rep. Peter King, chairman of the House Homeland Security Committee, said the circumstances of the FBI probe smacked of a cover-up by the White House.

"It seems this (the investigation) has been going on for several months and, yet, now it appears that they're saying that the FBI didn't realize until Election Day that General Petraeus was involved. It just doesn't add up," said King, R-N.Y.

Petraeus, 60, quit Friday after acknowledging an extramarital relationship. He has been married 38 years to Holly Petraeus, with whom he has two adult children, including a son who led an infantry platoon in Afghanistan as an Army lieutenant.

Broadwell, a 40-year-old graduate of the U.S. Military Academy and an Army Reserve officer, is married with two young sons.

Petraeus' affair with Broadwell will be the subject of meetings Wednesday involving congressional intelligence committee leaders, FBI deputy director Sean Joyce and CIA deputy director Michael Morell.

Petraeus had been scheduled to appear before the committees on Thursday to testify on the attack in Benghazi. Republicans and some Democrats have questioned the U.S. response and protection of diplomats stationed overseas.

Morell was expected to testify in place of Petraeus, and lawmakers said he should have the answers to their questions. But Feinstein and others didn't rule out the possibility that Congress will compel Petraeus to testify about Benghazi at a later date, even though he's relinquished his job.

"I don't see how in the world you can find out what happened in Benghazi before, during and after the attack if General Petraeus doesn't testify," said Sen. Lindsey Graham, R-S.C.

Graham, who is a member of the Senate Armed Services Committee, wants to create a joint congressional committee to investigate the U.S. response to that attack.

Feinstein said she first learned of Petraeus' affair from the media late last week, and confirmed it in a phone call Friday with Petraeus. She eventually was briefed by the FBI and said so far there was no indication that national security was breached.

Still, Feinstein called the news "a heartbreak" for her personally and U.S. intelligence operations, and said she didn't understand why the FBI didn't give her a heads up as soon as Petraeus' name emerged in the investigation.

"We are very much able to keep things in a classified setting," she said. "At least if you know, you can begin to think and then to plan. And, of course, we have not had that opportunity."

Clapper was told by the Justice Department of the Petraeus investigation at about 5 p.m. on Election Day, and then called Petraeus and urged him to resign, according to a senior U.S. intelligence official who spoke on condition of anonymity because he was not authorized to discuss the investigation publicly.

FBI officials say the committees weren't informed until Friday, one official said, because the matter started as a criminal investigation into harassing emails sent by Broadwell to another woman.

Concerned that the emails he exchanged with Broadwell raised the possibility of a security breach, the FBI brought the matter up with Petraeus directly, according to the official, who spoke on condition of anonymity because he was not authorized to publicly discuss the investigation.

Petraeus decided to quit, though he was breaking no laws by having an affair, officials said.

Feinstein said she has not been told the precise relationship between Petraeus and the woman who reported the harassing emails to the FBI.

Georgia Sen. Saxby Chambliss, the top Republican on the Senate intelligence committee, called Petraeus "a great leader" who did right by stepping down and still deserves the nation's gratitude. He also didn't rule out calling Petraeus to testify on Benghazi at some point.

"He's trying to put his life back together right now and that's what he needs to focus on," Chambliss said.

King appeared on CNN's "State of the Union." Feinstein was on "Fox News Sunday," Graham spoke on CBS' "Face the Nation," and Chambliss was interviewed on ABC's "This Week."

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Associated Press writers Michele Salcedo, Pete Yost and Matthew Lee contributed to this report.

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British medical journal slams Roche on Tamiflu

LONDON (AP) — A leading British medical journal is asking the drug maker Roche to release all its data on Tamiflu, claiming there is no evidence the drug can actually stop the flu.

The drug has been stockpiled by dozens of governments worldwide in case of a global flu outbreak and was widely used during the 2009 swine flu pandemic.

On Monday, one of the researchers linked to the BMJ called for European governments to sue Roche.

“I suggest we boycott Roche’s products until they publish missing Tamiflu data,” wrote Peter Gotzsche, leader of the Nordic Cochrane Centre in Copenhagen. He said governments should take legal action against Roche to get the money back that was “needlessly” spent on stockpiling Tamiflu.

Last year, Tamiflu was included in a list of “essential medicines” by the World Health Organization, which often prompts governments or donor agencies to buy the drug.

WHO spokesman Gregory Hartl said the agency recommended the drug be used to treat unusual influenza viruses like bird flu. “We do have substantive evidence it can stop or hinder progression to severe disease like pneumonia,” he said.

In 2009, the BMJ and researchers at the Nordic Cochrane Centre asked Roche to make all its Tamiflu data available. At the time, Cochrane Centre scientists were commissioned by Britain to evaluate flu drugs. They found no proof that Tamiflu reduced the number of complications in people with influenza.

“Despite a public promise to release (internal company reports) for each (Tamiflu) trial…Roche has stonewalled,” BMJ editor Fiona Godlee wrote in an editorial last month.

In a statement, Roche said it had complied with all legal requirements on publishing data and provided Gotzsche and his colleagues with 3,200 pages of information to answer their questions.

“Roche has made full clinical study data…available to national health authorities according to their various requirements, so they can conduct their own analyses,” the company said.

Roche says it doesn’t usually release patient-level data available due to legal or confidentiality constraints. It said it did not provide the requested data to the scientists because they refused to sign a confidentiality agreement.

Roche is also being investigated by the European Medicines Agency for not properly reporting side effects, including possible deaths, for 19 drugs including Tamiflu that were used in about 80,000 patients in the U.S.

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www.bmj.com.tamiflu/

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Labels maintain new music spend despite sales slump

LONDON (Reuters) – Record labels say they have maintained high levels of investment in new music despite sweeping changes to their business in the digital age and a decade of falling revenues caused by sliding album sales and online piracy.

According to a new study from industry body IFPI published on Monday, record companies invested $ 4.5 billion in A&R (artists and repertoire) and marketing in 2011.

That was down from $ 5 billion in 2008, partly due to a significant drop in the amount record labels were willing to spend on marketing up-and-coming talent at a time of shrinking income.

But the A&R side fell less sharply to $ 2.7 billion last year versus $ 2.8 billion in 2008 despite a decline of 16 percent in the trade value of the industry globally over the same period.

Presenting the report in London, Max Hole, COO of Universal Music Group International, said he was cautiously optimistic that the music business would return to growth soon, helped by the proliferation of digital platforms.

“The stats are getting better, the rate of decline is slowing,” he told reporters.

“There’s every reason to hope that in the next couple of years we’ll reach the low point and start to go back to growth.”

According to the IFPI, in the first nine months of 2012, global recorded music sales had fallen by around one percent year-on-year after a fall of three percent in 2011.

The industry peaked in 1999 when sales were $ 28.6 billion, but has shrunk every year since, reaching $ 16.6 billion in 2011.

“I just feel that we are at a tipping point of lots and lots of services coming on, and services that really are in touch with the consumer,” Hole said, adding that, crucially, the platforms were more attractive than illegal pirate sites.

BANDS WANT LABELS

The report showed that more than 70 percent of unsigned acts in Britain and Germany wanted a record deal, despite the perception that many artists are keen to go it alone with the help of social networking.

Major labels have been accused of being slow to adjust to the challenges posed by digital music and illegal downloads, and relying too heavily on older, established acts to make money.

But the IFPI report sought to underline their role in unearthing new talent in a notoriously risky business.

Revenues invested in A&R represent around 16 percent of industry turnover, compared with 15.3 percent in the pharmaceuticals and biotech sector and 9.6 percent in software and computing.

The IFPI estimated breaking a pop act in a major market typically costs from $ 750,000 to $ 1.4 million, including a $ 200,000 advance, $ 200-300,000 on recording, $ 50-300,000 on videos, $ 100,000 on touring and $ 200-500,000 on marketing.

The Internet has revolutionized the way record labels go about their business, the report said.

A&R representatives today rely on the Internet as much as they do on attending gigs up and down the country to discover the next best thing, although most still want to see an act live before making up their minds.

According to the report, record labels are providing far more digital content as part of their marketing and promotion, and tend to sign deals with artists which go well beyond the shrinking recorded music business.

Brand partnerships, offering songs for use on television, in film and in commercials, and linking up singers from different regions to generate cross-over interest are just some of the ways they can help establish a new act, the IFPI added.

Hole said the recent merger between Universal, already the world’s largest music label, and EMI, would not lead to less A&R spending, but more.

“We have stated quite categorically that our intention is to reinvest in EMI and boost it and we think it will result in more investment in A&R,” he said.

“We operate a multi-label structure and that was something that had declined at EMI,” he added. “We’re going to reverse that.”

(Editing by Steve Addison)

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